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Companies need to reinvent their reporting alongside reinventing the business
We all like a good story, especially if it has a happy ending – and here’s the thing: the humble CR report can deliver that. Really.
In this article I’m calling for a full-scale revolution in how businesses see themselves and how we see them. I am calling for way more than integrated reporting – sorry to spoil the party but shoe-horning some CR fluff in with the income statements, cash flows and balance sheets is not moving things forward.
So I’ve been looking over a few award-winning reports, as well as reports I like, to uncover seeds of revolutionary reporting and I will give some practical steps around how to turn the tide in a two-part commentary over this and next month's issue. The first part looks at how to think revolutionary while the second part will map out what reporting 2.0 might look like.
Consider your social purpose
Scandals in recent years, ranging from tax to Libor, to collapsing garment factories to horse meat, point to an existential crisis for business. From the ashes comes an opportunity for companies to completely rethink their purpose. And if the premise of serving society (and I include environment under society) sounds naïve and utopian, read on, because every day businesses are showing that this is possible.
Take the Co-operative Group’s purpose of “championing a better way of doing business for you and your communities”, or Delta Airlines’ “force for positive local and global change”. Nestlé almost manages this by coining “shared value”. However, behind the progressive rhetoric is fairly standard sustainability communication and, sadly, shared value has evolved into the latest catchphrase in a CR world where reinventing the language has got in the way of reinventing the business.
Best practice reporter Nike also falls short: “Nike is dedicated to serving athletes and helping them reach their full potential. As a growth company we are dedicated to creating value for our shareholders.” It would seem that bringing fitness and healthy living to the masses doesn’t cut it as a corporate purpose. But Nike does have a point. Businesses are not charities and people in them don’t go to work every day to change the world. I get this.
My point is that it is possible to make even more money further into the future by having a social purpose. Take banking, where the entire sector (and entire economies) collapsed because its mission had crept from customer servicing to personal greed. Compare this to the success of companies like Uber and Airbnb, which have taken the sharing economy by storm.
Here’s the tricky bit though. While it is possible to make money from doing good, changing the entire business model needs big-cheese buy-in. But when a CEO’s tenure is around four years in the FTSE100, starting – let alone sustaining – a revolution is not going to be easy.
A new breed of business leaders does offer hope – people like Paul Polman, Ian Cheshire, Ray Anderson, Stuart Rose. These guys (yes, all men but let’s fight one battle at a time) have made a name for themselves by thinking differently and PwC’s annual CEO survey indicates that this mindset might be taking root in the City.
Revolutionary reporting guide: rethinking your reporting values
Get to know your audience
Now let’s get to the nitty-gritty of the report itself. Who is your audience? This doesn’t sound radical but remarkably few companies I work with ask this question before embarking on the £250k+ investment involved in creating a comprehensive, high-quality report. Equally few use website analytics to understand who is viewing what.
Asking your stakeholders what they think may also seem obvious, but few are doing it.
>>My tip: At the very least, give a copy of the current report to a focus group of employees, customers, investors and NGOs (realistically they will need an incentive). You will gain invaluable market research and can begin to tailor your reporting to new audiences.
Bespoke communications cost money but, by cutting the voluminous verbiage (see below), you will still be quids-in. What’s more, to use another tired CR phrase, you will ‘engage your stakeholders’ along the way and give them a chance to set your future direction, as opposed to simply feeding back on what you’ve done in the past.
Scrap the superfluous
In my previous article for Ethical Corporation, I revealed my copywriting mantra: if you can’t prove it, delete it. Using this rule, I am confident you will be able to boil your report down to 25 pages – the length of a standard highlights report, without compromising its robustness. Remember, your report is a piece of communication, a story; it is not a directory of everything you have ever done.
>> My tip: To keep your comms short and sweet, hive off content for different audiences (see above) and move the methodology to an appendix or dedicated evidence section online. By methodology I mean materiality charts, stakeholder engagement processes and assurance – in which I count the Global Reporting Initiative, the International Integrated Reporting Council and the Sustainability Accounting Standards Board, as well as independent assurers.
Think about it… you don’t read newspaper articles or watch documentaries where you have to sit through a massive preamble about how the research was carried out; you engage in the story in the knowledge that it was credibly researched; and if in doubt you dig a bit deeper to reassure yourself.
So in the same vein, why do we need to read four pages about how a business brought in consultants to plot its material issues on a graph – this, ironically, is immaterial.
In next month’s magazine, I will map out what a contents plan for a revolutionary report might look like, giving simple, practical and cost-saving ways to revolutionise your report.reporting CR Reporting Kingfisher Integrated reporting tax Libor Nike
November 2015, London
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